What Influences The Price Of Crypto?

Crypto has had a volatile few weeks. Have you ever wondered why that might be? Today, we’ll explore 5 factors that impact crypto prices. We’ll also give you a rundown of the key events that should be inside your trading diary this week. Let’s go!

1. Supply and demand

Like all commodities, most cryptos are governed by the laws of supply and demand. One great example is Bitcoin , only 21 million bitcoin can ever be mined. As a finite commodity, price appreciates due to the scarcity of the resource, i.e. lack of supply.

2. The media

News media can both help and harm cryptos as it helps drive retail investor sentiment. The way the media writes about cryptocurrencies can massively impact demand. Good news can certainly increase it, while bad news can cause panic and mass sell-offs, driving the price down.

3. Global events

Although cryptocurrencies are less impacted by global events and macroeconomic data, they aren’t immune to them. For example, while crypto CFD traders don’t usually trade the US Non-Farm Payroll (NFP) report, the release of the NFP does have an impact on the value of Bitcoin.

4. Rules and regulations

This is a bit of a no brainer. The various different types of rules or requirements introduced by national authorities can have either a positive or negative affect on crypto price.

5. Mining

This one depends on the asset, but generally speaking, cryptocurrencies don’t just come from nowhere. Crypto miners extract them (via mining) using extremely powerful GPUs. This process becomes more and more difficult and less rewarding over time. If the cost of extracting a digital currency increases, it will have a major impact on the price of the asset.

What’s on the trading agenda this week?

A really busy week lies ahead. Here are all of the top events to take note of.

Monday 26th April

● USD — Durable Goods Orders MoM (MAR)

Tuesday 27th April

● JPY — BoJ Interest Rate Decision; BoJ Quarterly Outlook Report

Wednesday 28th April

● AUD — Inflation Rate YoY (Q1)

Thursday 29th April

● EUR — German Unemployment Change (APR); Unemployment Rate (APR); Inflation Rate YoY Preliminary (APR)

Friday 30th April

● CNY — NBS Manufacturing PMI (APR)

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